Encyclopedia of Opinion
Question
Is inflation understated?
Position‹2 of 3›

Yes, inflation is understated

This position holds that inflation is understated. It argues governments have a vested interest in low headline figures, that the underlying data is largely theoretical, that quality adjustments mask real price rises, and that official indices fail to reflect everyday reality.

Supporting arguments · 4

  1. The Government ensures inflation is understated
    The government has a vested interest in understating inflation because payments are tied to it.
  2. Quality adjustments cause inflation to be understated
    Quality adjustments may account for improvements in standards of living, but the consumer doesn’t pay lower prices.
  3. Inflation is multi-dimensional.
    Representative basket of goods varies by geography and income bracket. There should be thus multiple inflation numbers reflecting this.
  4. Inflation indices do not reflect reality
    Much of the inflation basket is theoretical and not based on increases in price.